The author has been forced to defend himself after being labelled an “embarrassment” over his most recent financial advice.
Money expert Scott Pape, who is better known as the Barefoot Investor, has hit back at claims that he is “costing his followers” a fortune by not backing cryptocurrency.
He has been accused of “embarrassing” himself and sticking his “head in the sand” when it comes to making money on crypto like bitcoin and ethereum, as well as new coins.
In a question shared in Mr Pape’s most recent newsletter, Chris tells the Barefoot Investor that he is willing to put aside the “1000 per cent of gains” on various coins and focus on income instead.
He questions why Mr Pape doesn’t encourage staking of coins, where some of your holdings can earn a percentage-rate reward over time.
“Who doesn’t want a 17 per cent return from staking coins? Crypto and DeFi (Decentralised Finance) are the future. The Barefoot Investor is the past. Wake up. You’re embarrassing yourself,” wrote Chris.
But Mr Pape said he found the “attack” amusing and tells Chris he has him “all wrong”.
“I’m wide awake, and watching finance being both disrupted and digitised,” he said.
“The only difference is that I haven’t made it part of my belief system, as so many other people seem to have.”
While he could admire and cheer on the next development on the internet, at the same time he wasn’t going to stop “calling out a lot of dumb, greedy stuff that’s going on”, Mr Pape said.
The Australian author used the example of a crypto token that shares the same name as the new Covid-19 variant, called Omicron, which skyrocketed 1100 per cent last weekend.
It jumped to nearly $700 last week – about 10 times its previous value, according to the crypto news website CoinMarketCap.
“Why? Because it has the same name. Seriously. It starts and ends right there. Then Monday came the hangover, and the coin nosedived 75 per cent overnight,” Mr Pape noted.
“Yet at the time of writing, it’s still worth around $440 million. That’s some serious coin.”
Mr Pape went on to add that he is one person who doesn’t want a 17 per cent return on staking coins.
“Let me explain why: for all the amazing technological progress that’s occurring right now, none of it changes the basic tenet of risk and reward,” he said.
“In a world of zero per cent interest rates, any investment that offers a 17 per cent yield is a red flag that you’re taking on an increased risk that you’ll lose your money.”
In a recent column on his personal website, the Barefoot Investor also broke down the risk of diluting your funds across several coins, warning that not all of the assets are likely to boom as significantly as bitcoin.
He said what’s going on in the crypto space is absolutely fascinating.
“We’re in the early stages of a revolution, watching the financial industry be both disrupted and democratised. Clearly, this is the future,” he said.
“Yet history also teaches us that in every gold rush there are scams, cons and bubbles just waiting to be popped. This time is no different. If anything it’s worse — today a majority of Gen Z investors in the US think crypto will make them millionaires, according to a new survey by data analytics firm Engine Insights.”
Despite many dogecoin investors making astronomical gains off the back of an internet meme, Mr Pape said the pipe dream of earning millions of dollars from a tiny investment is over.